A Family Trust (also sometimes called a Family Protection Trust or “Bloodline” or “Dynasty” trust), is a trust that continues after the parent’s death through the life of their children. The parent (who created the Family Trust and is called the “grantor”) can even choose to have the Family Trust continue for the life of grandchildren if desired. Funds are placed into the Family Trust, either during the parent’s lifetime or at the death of the parent, and are there to benefit the children and/or grandchildren. However, there are limits placed on the beneficiaries’ access the trust funds, which helps to protect the funds for the family.
The Family Trust can help to protect against future divorce, or lawsuits, or bad judgment (such as bad investments or foolish spending). While the Family Trust is more expensive to implement for attorneys fees, that cost can be minimal compared to the possibly overall savings. Also, some trust beneficiaries object to having limited access to their trust fund, although it is for their own protection.
The biggest downside to having a Family Protection Trust is choosing the appropriate trustee. The best answer will be an independent trustee such as a bank or trust company. Alternatively, the child could be trustee of his own trust but then have the ability to resign and appoint an independent trustee if trouble appears. That gives the child more control but also make the trust more susceptible to being lost to unwise spending if the child can use any or all of the trust.
The Family Trust is another way for Greensboro estate planning to benefit parents and families. Parents can rest assured that what they have worked so hard for over the years will be there for their children for their own retirement years.